STRONG MARCH SALES MASK SOFTENING IN VEHICLE MARKET
- March traditionally second strongest month of the year
- Sales marginally down on same month in 2012
- Pressure to remain on disposable income
|Market segment||2012||2013||% change|
|Passenger vehicles||38 996||37 596||-3.6%|
|Light commercial vehicles||14 605||14 794||+1.3%|
|Medium commercial vehicles||983||1 015||+3.3%|
|Heavy commercial vehicles||426||393||-7.7%|
|Extra Heavy commercial vehicles||1 011||1 036||+2.5%|
|Vehicle exports||23 968||28 338||+18.2%|
|Overall market (local)||56 152||54 946||-2.1%|
March, traditionally the biggest sales month after October, lived up to expectations with 54 946 new vehicle sales recorded in the month by the National Association of Automotive Manufacturers of South Africa (Naamsa).
New vehicle sales were up by 3.3% on February, but were lower in comparison to the March last year. This was in line with expectations of a lower rate of growth in 2013, but is also due to the Easter weekend falling in March and the subsequent decline the number of sales days.
Toyota performed strongly with total sales of 10 593 units or close to 20% of the total South African market. It also led a strong surge in export sales with 8 779 vehicles exported in left and right hand drive destinations across Africa and Europe.
“March sales were boosted by several factors,” says Dr Johan van Zyl, President and CEO of Toyota South Africa Motors. “As the end of the quarter and the end of the fiscal for many public and private companies March traditionally sees large bulk purchases and final tender allocations. This is of course further supported by high retail activity from vehicle retailers who want to end the quarter in the black.”
According to Dr Van Zyl these positive factors are counterbalanced by increasing pressure on disposable income. Several fuel price increases and continued food price inflation has put a damper on household spending, which supports the view of lower vehicle sales growth in 2013.
Toyota’s sales estimates are supported by finance applications and approvals to Toyota Financial Services (TFS). TFS reports a 7.59% decline in finance applications in March, but an overall increase of 9.9% in applications for the quarter.
Light commercial vehicle sales remained buoyant thanks to Hilux sales of 3 637 units, while medium, heavy and extra heavy commercial vehicles recorded mixed success that remain in-line with expectations.
“We expect vehicle sales to return to growth for the rest of the year, albeit at a much slower pace than in 2012. This expectation considers a lower rate of GDP growth and continued pressure on disposable income on the one hand and continued marketing, many new vehicle introductions and a low interest rate environment on the other,” says Dr Van Zyl.